The Commerce Department reported today that Construction of new homes and apartments fell to a 17-year low in August, dropping to a seasonally adjusted annual rate of 895,000 units.
Mark Zandi, chief economist at Moody’s Economy.com said: “The housing market is just cratering … sales, prices and construction are all down. That is the fundamental reason why the economy is having so much trouble.” San Diego real estate sales
The housing market peaked around 2005-2006. A lot of 5-year fixed interest-only loans will reset in 2010-2011. That means more foreclosures in the future.
Real Estate Specialist
Home prices do not double in price on average every ten years. There is no evidence to support sucha statement. S&P case shiller home index which goes back to 1890 found that SFR price’s went up at the rate of inflation over time. If they do double in any short period its called a asset bubble and values return to medium as the bubble implodes. OFHEO also shows long term prices run with inflation and return to normal price levels rather then continuing to rise. In order for RE to double every 10 years average income would also need to rise with it, which if you hav’t noticed doesn’t happen and when it does as during the 70’s yield on bonds jump into the teen’s and the FED pushes up interest rates causing home prices to decline.
San Diego Dentist
Everyone likes to talk about the foreclosures as if it’s a bad thing when the reality is that it’s an incredibly good thing. All the bad loans inflated the market well beyond what it should have been. As these people default on their bad loans the price of housing corrects, as it should, and maybe the rest of us get to buy. This story is good news and it should be reported as such. Or, would we all be better off if the government steps in and inflates pricing again.
Northern California Lawyer
“They’re not making anymore land”, “It’s different in (insert your city)”, “everyone wants to live here”, “buy now or be priced out forever”…etc. These are all the lines that the sheeple have bought into from the real estate industry and all their “experts”. Bottom, line: this is the tip of the iceberg. People seem to forget history, and how it has a way of repeating itself. This is not a 1 year “slump”, this is an end to a cycle of people’s pie-in-the-sky attitude about real estate. I cannot wait to buy a house in 3-5 years, when prices are REALLY good. If you buy now, you’re overpaying. Think about it: is 20% off an item that is marked up 400% a good deal?
Los Angeles Bail
Why do we think jeopardizing our country’s future for short term gain is a good idea? As a whole, Americans live beyond their means and rely on….credit. You can’t expect Uncle Sam to “fix” all of your personal finance problems. Time to let the chips fall where they may…
San Diego Tourism
This is a terrific page. I am so thrilled the online market place still has good content and articles.